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Cryptocurrencies as a whole are an amazing innovation. It’s sad though to see people rushing to adopt things they don’t fully understand, and getting hurt as a

Cryptocurrencies as a whole are an amazing innovation. It’s sad though to see people rushing to adopt things they don’t fully understand, and getting hurt as a result. Bitcoin and Ethereum are pretty terrible currencies. Proof-of-work is a foundational idea in cryptography, but it’s much better suited for preventing mass email spam than it is as a consensus mechanism. Not to mention how the cryptocurrency space is crowded with useless AltCoins. Unless you’re an expert in the space, its so hard to distinguish from true innovation and dummies just trying to get a piece of the pie. As a result, you have millions of people pushing things like Dogecoin and Shiba, and it ends up hurting real people. The way I see it is this: a useful cryptocurrency needs 3 things: (1) Security (2) Scalability (3) Decentralization Almost all mainstream crypto fails at (2) miserably, and as a result end up failing at (3). High transaction fees, volatility, low throughput, and energy-intensive participation costs are all barriers to achieving actual utility.

javert 5y ago
It is not clear that proof of stake can be very decentralized. Proof of work, however, can be. Bitcoin can scale using 3rd party payment providers . That's exactly how fiat currencies are made to scale. We use Visa, PayPal, Zelle, ACH, Swift, etc. We usually do not talk to a ledger at the Fed or ECB, even though they do have those (for huge banks or wire transfers).
- riptheworld 5y ago
  I'm not sure what you mean when you say that Bitcoin can scale by using 3rd party payment providers? Any Bitcoin transaction will only ever be as fast as the underlying blockchain, which currently processes around seven transactions per second (last time I checked). Of course proof of stake can be decentralized! I think what you mean is that it's not clear whether a widely adopted PoS based blockchain will end up centralizing power in the hands of a few whales. This is a legitimate concern; however, this threat is no different than the threat of centralization of computing power in Bitcoin. In Bitcoin, this isn't even a threat, it’s a reality! I'll say it again: Bitcoin and Ethereum are not great currencies. There are altcoins that have far surpassed both of them in terms of achieving security, scalability, and decentralization simultaneously.
  - wanderingmind 5y ago
    Can you provide more details/references to your statement on altcoins that have better scalability and decentralization.
    - riptheworld 5y ago
      [dead]
      - javert 5y ago
        > I don’t want to turn this thread into a crypto version of Wall Street Bets where people are arguing over their favorite coins it seems like that's exactly what you want. Given that you are spreading lots of misinformation and don't seem to be trying to understand the other side's point.
      - tromp 5y ago
        > The Algorand cryptocurrency achieves thousands of transactions per second And is it possible to sync to the current Algorand state by downloading and verifying the complete transaction history, like I can with Bitcoin? And if so, how big is that download? Bitcoin limits the tx rate on purpose so that the Initial Block Download remains feasible on average hardware, and no trust is needed beyond the integrity of the client software.
        riptheworld 5y ago
        Bitcoin’s throughput is limited as a function of network security and network delay. It has nothing to do with making it easier for clients to sync with the current state. You can improve Bitcoin’s transaction rate in two ways: 1.) decrease mining difficulty, i.e., the amount of hashing required to produce a valid proof-of-work on average. This impacts the security of the network. 2.) increase the block size so you can fit more transactions into a single block. This negatively impacts network latency (and therefore scalability, as it increases the burden of propagating messages across the network). To your question on Algorand: yes, new consensus participants can quickly and easily sync with the current state of the blockchain through fast catch-up [1], without any meaningful security degradation [2]. [1] https://youtu.be/BOnond-J3Zo https://youtu.be/BOnond-J3Zo [2] https://eprint.iacr.org/2018/269.pdf https://eprint.iacr.org/2018/269.pdf

javert 5y ago

It is not clear that proof of stake can be very decentralized. Proof of work, however, can be. Bitcoin can scale using 3rd party payment providers . That's exactly how fiat currencies are made to scale. We use Visa, PayPal, Zelle, ACH, Swift, etc. We usually do not talk to a ledger at the Fed or ECB, even though they do have those (for huge banks or wire transfers).

riptheworld 5y ago
I'm not sure what you mean when you say that Bitcoin can scale by using 3rd party payment providers? Any Bitcoin transaction will only ever be as fast as the underlying blockchain, which currently processes around seven transactions per second (last time I checked). Of course proof of stake can be decentralized! I think what you mean is that it's not clear whether a widely adopted PoS based blockchain will end up centralizing power in the hands of a few whales. This is a legitimate concern; however, this threat is no different than the threat of centralization of computing power in Bitcoin. In Bitcoin, this isn't even a threat, it’s a reality! I'll say it again: Bitcoin and Ethereum are not great currencies. There are altcoins that have far surpassed both of them in terms of achieving security, scalability, and decentralization simultaneously.
- wanderingmind 5y ago
  Can you provide more details/references to your statement on altcoins that have better scalability and decentralization.
  - riptheworld 5y ago
    [dead]
    - javert 5y ago
      > I don’t want to turn this thread into a crypto version of Wall Street Bets where people are arguing over their favorite coins it seems like that's exactly what you want. Given that you are spreading lots of misinformation and don't seem to be trying to understand the other side's point.
    - tromp 5y ago
      > The Algorand cryptocurrency achieves thousands of transactions per second And is it possible to sync to the current Algorand state by downloading and verifying the complete transaction history, like I can with Bitcoin? And if so, how big is that download? Bitcoin limits the tx rate on purpose so that the Initial Block Download remains feasible on average hardware, and no trust is needed beyond the integrity of the client software.
      - riptheworld 5y ago
        Bitcoin’s throughput is limited as a function of network security and network delay. It has nothing to do with making it easier for clients to sync with the current state. You can improve Bitcoin’s transaction rate in two ways: 1.) decrease mining difficulty, i.e., the amount of hashing required to produce a valid proof-of-work on average. This impacts the security of the network. 2.) increase the block size so you can fit more transactions into a single block. This negatively impacts network latency (and therefore scalability, as it increases the burden of propagating messages across the network). To your question on Algorand: yes, new consensus participants can quickly and easily sync with the current state of the blockchain through fast catch-up [1], without any meaningful security degradation [2]. [1] https://youtu.be/BOnond-J3Zo https://youtu.be/BOnond-J3Zo [2] https://eprint.iacr.org/2018/269.pdf https://eprint.iacr.org/2018/269.pdf